Best practices for property management fees

[Joe Fish]

For the property managers in the audience... when setting up a property management agreement, what would you consider to be the best way to handle fees that aren't covered in the monthly management fee?

The way I see it is that the monthly fee should cover coordinating routine maintenance (HVAC tuneup or minor maintenance, leaky faucets and drains, sprinklers, minor pest control, etc.), but larger ticket items that may require multiple bids, permits, or otherwise could have reasonably been prevented should be handled separately and charged to the owner. Otherwise, older properties and those with a lot of deferred maintenance will require a lot of attention from a property manager that isn't compensated. 

My question is how do property managers structure their agreements to account for the different types of maintenance that come up. It seems like there's a lot of grey area here. Similarly, do you set an hourly rate for light maintenance performed by the PM? Thanks for insights!

[Cameron Tope]

Joe, 

I've been to events and meetups with many different management companies from all across the US and there are very little consistencies on the fee structure. 

The main best practice is transparency. Clients don't like when they think they're getting charged $100/mo per unit then pay a dozen or more in junk fees every time they turn around. 

Be clear about the fee and what you provide for the fee, and you'll be fine.

Best of luck!